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Monday, November 23, 2015

French experts propose Carbon Price-and-Rebate Plan

Suggested mechanism simultaneously sets a price on emissions above a certain threshold and defines how the revenues raised should be used. The price-and-rebate mechanism is inspired by the “bonus/malus” scheme in France, in which buyers of new cars are taxed or given a bonus depending on the vehicle’s CO2 emissions. Under the mechanism, a country exceeding the worldwide average for per capita emissions would pay a specified amount on every ton of CO2 (or its equivalent) above a set threshold. The specific carbon price would depend on the objectives of the agreement. A price of $1-2 per ton would generate $14-28 billion, enough to fund the deployment of the monitoring, review, and verification process in developing countries. A rate of $7-$8 per ton would generate $100 billion a year after 2020 to help underdeveloped countries mitigate and adapt to climate change. Of that $100 billion, a little over $60 billion would come from Western countries and Japan, and just under $20 billion would come from hydrocarbon-exporting countries (Russia and Saudi Arabia in particular) and high-growth Asian economies (including China and Korea). Read more at http://www.project-syndicate.org/